Editorial: Undermining Jobs With Illogical Policy
After much debate and uncertainty, President Susilo Bambang Yudhoyono signed into regulation banning all mineral exports starting at midnight on Sunday.
The stated objective of the ban is laudable; to boost processing of raw minerals domestically. Earning higher returns from our rich natural resources is a must and developing processing industries onshore will over the long term encourage higher value-added industries.
Yudhoyono's last-minute tweak on the regulation, however, exempted 66 major mining companies, including Freeport Indonesia and Newmont Nusa Tenggara, from the ban until 2017, making hundreds of smaller-scale miners the real losers because they cannot afford to invest the hundreds of millions of dollars needed to build smelters.
It is hard for us to find logic behind a move that creates such uncertainty in a highly charged political year, let alone the adverse impact on the economy, mineral shipments totaled $10.4 billion in 2012, or around 5 percent of our total exports, according to the World Bank. The threat to jobs is our highest concern.
More than 100 mining companies have been forced to reduce or shut down operations due to the uncertainty surrounding the mineral export ban, and the National Solidarity of Mine Workers (Spartan) fears at least 2.8 million workers could lose their jobs if the regulation is implemented.
This is ironic because the regulation was aimed at boosting domestic industry and creating more jobs.
We hope the government has a plan on what to do with the hundreds of thousands of people who may become unemployed, as well as the millions who depend on them. While the expected benefits of the regulation are questionable at best, the present sacrifice is very real. We can't buy a promise for a better future anymore because — as John Maynard Keynes put it — in the long run, we are all dead.
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